I warned of the commercial real estate sector some time ago. It is soon time for the chickens to come home to roost.
"Big Loan has done quite a job building Wachovia’s commercial mortgage backed securities business — the bank more than doubled the amount of loans it placed in CMBS during the first half of this year, at $18.23 billion from $8.89 billion in the same period of last year.
Did “Big Loan” make some of its clients an offer they couldn’t refuse? If he did, there may be some regrets now. Some rival bankers called Wachovia “reckless” in building its CMBS market share and say it is now sitting on billions of property debt that investors find too risky. Wachovia declined to comment on this as well."